If you’re financing a home in Henrico County, your mortgage company will require a title insurance policy before closing, but the rules around who pays, what’s covered, and whether you need a second policy for yourself trip up a lot of first-time buyers. Two distinct policies are typically in play at every closing table: one that protects the mortgage company’s lien and one that protects your equity, and only one of them is mandatory.
Written by Duane Buziak, NMLS #1110647 | Coast2Coast Mortgage LLC NMLS #376205
Owner’s Policy vs. Lender’s Policy: The Two Types of Title Insurance
Title insurance is a one-time premium paid at closing, not a recurring bill like homeowners insurance. It protects against defects in the property’s ownership history that a title search might miss: an old lien, a forged deed somewhere in the chain of title, an unknown heir who claims a stake in the property, or an unpaid contractor’s claim filed years earlier. Once you pay the premium, the coverage runs as long as you or your mortgage company hold an interest in the property, with no renewal payments.
Lender’s title insurance protects your mortgage broker’s lien position and is required on virtually every financed purchase or refinance in Henrico County. Owner’s title insurance protects your equity in the home and is optional, though most settlement agents and mortgage professionals recommend it because it’s the only policy that pays you directly if a covered title defect surfaces after closing.
| Feature | Owner’s Title Insurance | Lender’s Title Insurance | Why It Matters |
|---|---|---|---|
| Who it protects | The buyer/homeowner | The mortgage company | Only the owner’s policy pays you if your ownership is challenged |
| Required or optional | Optional | Required by virtually all mortgage companies | Skipping the owner’s policy leaves your equity unprotected |
| Coverage amount | Typically the purchase price | Typically the loan amount | Coverage doesn’t automatically match what you actually stand to lose |
| When it ends | As long as you or your heirs hold title | When the loan is paid off or refinanced | A refinance triggers a brand-new lender’s policy even if your owner’s policy stays active |
Why Henrico Lenders Require a Title Search and Lender’s Policy Before Closing
Before any mortgage company releases loan funds, it needs proof that the seller actually owns the property free and clear of undisclosed claims. That’s what the title search accomplishes: a title company or attorney combs through county land records looking for old mechanic’s liens, unpaid HOA dues, unresolved tax liens, or judgments recorded against a prior owner that never got cleared. If any of these turn up, they typically have to be resolved before the mortgage company will fund the loan, because an unresolved lien could jump ahead of the mortgage company’s lien position.
This isn’t a hypothetical concern in Henrico. Properties near established neighborhoods like Lakeside, Tuckahoe, and Glen Allen sometimes carry deed records going back many decades, along with easements, boundary line agreements, or old subdivision covenants that surface during a title search and need clarification before closing can proceed. Newer construction in areas like Short Pump or Wyndham tends to have cleaner, more recent chains of title, but even there, a paid-off home equity line or a solar panel lien that wasn’t released properly can hold up a closing if it isn’t caught early.
One detail that confuses buyers: the lender’s policy amount matches your loan amount, not the purchase price. If you’re buying a $450,000 home with a $405,000 loan, your lender’s policy is written for $405,000, not the full purchase price. As you pay down your mortgage over the years, the practical exposure the mortgage company faces shrinks, but the policy itself doesn’t shrink, adjust, or issue a refund. It simply stays in force at its original face amount until the loan is paid off, refinanced, or the property is sold, whichever comes first. The Consumer Financial Protection Bureau publishes consumer guidance explaining this distinction between owner’s and lender’s coverage in more detail for buyers who want to dig deeper before closing.
What Title Insurance Actually Costs: A Henrico Purchase Example
Virginia title insurance premiums are set through rate filings with the state Bureau of Insurance and vary somewhat by underwriter, so the figures below are illustrative, not a quote. Always ask your title company for exact numbers based on your purchase price, loan amount, and chosen underwriter before you budget your closing costs.
Here’s a worked example using a purchase near Short Pump. Suppose you’re buying a $450,000 home with a conventional loan at 90% loan-to-value, meaning a $45,000 down payment and a $405,000 loan. In this scenario, a lender’s title insurance premium often falls somewhere in the roughly $900 to $1,000 range, based on typical Virginia rate schedules for a loan of that size. If you add a simultaneous-issue owner’s policy, covering the full $450,000 purchase price, the incremental cost is often just a few hundred dollars more, because the title company issues both policies from the same title search and underwriting file rather than running two separate transactions. All told, a combined lender’s and owner’s policy on a purchase like this typically lands under $1,400 total, paid once at closing as part of your settlement charges.
That simultaneous issue discount is the reason most settlement agents recommend buying both policies together rather than skipping the owner’s policy at closing and trying to purchase one later. If you wait and buy an owner’s policy as a standalone transaction after closing, you generally lose the discounted simultaneous rate and pay closer to what a first-time, full-price owner’s policy would cost on its own. For a relatively modest incremental cost at closing, most Henrico buyers find the equity protection worth locking in while the rate is discounted.
Common Misconceptions Henrico Buyers Have About Title Insurance
The most persistent myth is that title insurance protects you against future problems with the property. It doesn’t. Title insurance only covers defects that existed before your policy date, things like a forged signature in a prior deed, an heir who wasn’t accounted for in an estate settlement, or a lien that was recorded but never properly released. It does not cover storm damage, code violations that arise after you buy, or physical defects in the home itself. Homeowners insurance and home inspections handle those separate categories of risk.
Another common point of confusion involves refinancing. If you already own a home in Innsbrook or Wyndham and you refinance your mortgage, your mortgage company will require a brand-new lender’s title policy on that refinance, even if you already hold an owner’s policy from your original purchase. That’s because the refinance creates a new insured interest for a new mortgage company, and your existing owner’s policy doesn’t extend to cover that new lien. The good news is that refinance title premiums are often discounted compared to a full purchase premium, since the title company may be able to rely on a more recent title search if you refinanced or purchased fairly recently.
A third misconception is that you’re stuck using whichever title company the seller’s agent or the listing recommends. In Virginia, buyers generally have the right to choose their own title company for a purchase, and that choice can affect both price and the level of service you get during closing. It’s worth asking your mortgage broker or real estate agent for a referral to a title company you trust rather than assuming you have no say in the matter.
Title Insurance FAQ
What is title insurance and why does my mortgage require it? Title insurance is a one-time policy that protects against ownership defects discovered after closing, and mortgage companies require a lender’s policy because it protects their lien position on the property they’re financing.
Do I have to buy an owner’s title policy if I don’t want to? No, an owner’s policy is optional in Virginia, though most settlement professionals recommend it because it’s the only policy that protects your personal equity in the home.
Who typically pays for title insurance in a Virginia purchase, buyer or seller? Practice varies by contract and negotiation, but in most Henrico purchase transactions the buyer pays for the lender’s policy and often the owner’s policy as well, unless the sales contract states otherwise.
Is title insurance a recurring cost like homeowners insurance? No, it’s a single premium paid at closing with no renewal payments, and coverage stays in effect as long as you or your mortgage company hold an interest in the property.
Does refinancing my Henrico home require a new title insurance policy? Yes, a refinance requires a new lender’s title policy because the new loan represents a new insured interest, even if your original owner’s policy from purchase remains valid.
What does title insurance not cover? It doesn’t cover physical property issues like storm damage, deferred maintenance, or code violations that arise after your policy date, since it only addresses ownership and lien defects that existed before you bought the home.
Can I shop around for my own title insurance company instead of using the one recommended at closing? Yes, Virginia buyers can typically choose their own title company, and comparing options can affect both your closing costs and the service you receive.
How long does a title search take before closing? Most title searches take one to two weeks to complete, though older Henrico properties with more complex deed histories can occasionally take longer if issues need to be resolved before closing.
Getting a Clear Picture Before You Make an Offer
Title insurance is a standard, one-time part of closing on a Henrico home, not something to dread or overthink. Once you understand the difference between the required lender’s policy and the optional owner’s policy, the line item on your closing disclosure stops being a mystery and becomes just another cost you’ve already budgeted for.
Your dream home in Henrico County is closer than you think. Discover exactly what you can afford with a credit-safe pre-qualification process that protects your score while unlocking your options. Get pre-qualified today and take the first step toward homeownership with a local mortgage expert who understands your community. Call Henrico Mortgage by Duane Buziak at 804-212-8663 for a clear breakdown of every closing cost line item, including title insurance, before you make an offer.